Jan 23, 2010

LGL joins ranks of 1 million ounce producers

PRESS RELEASE

GLOBAL gold company Lihir Gold Limited (LGL) delivered its fourth successive year of record gold production in 2009, with output exceeding one million ounces for the first time in the company’s history.

Production for the year totaled 1.12 million ounces, up 27 percent on the prior 12 months and in line with market guidance. Output rose to 278,000 ounces in the final quarter, an increase of 19 percent over the preceding three month period.

The LGL group maintained its track record as one of the world’s low cost producers with total cash costs for the year of US$397 (K1,052.40) per ounce. Fourth quarter total cash costs were $454 (K1,203.40) per ounce, down from $487 (K1,290.92) per ounce in the September quarter.

In 2010, output from LGL’s three producing operations is expected to be in the range of 960,000 to 1.06 million ounces. Group production is forecast to rise to 1.3 million ounces in 2012 as expansion projects lift output at Lihir Island and Bonikro.

Chief Executive Officer Phil Baker said the full year production result had advanced LGL decisively into the elite ranks of gold miners producing more than one million ounces of gold per year.

“Operationally the company performed very strongly in 2009, enabling us to meet market guidance for both gold production and unit cash costs,” Mr Baker said. “Going forward we aim to achieve consistent and reliable performance at all our operations, delivering on our guidance and keeping expansion projects on track.”

LGL’s production growth in 2009 was due to a combination of record output at the cornerstone Lihir Island operation, together with a full 12-month production contribution from the Bonikro and Mt Rawdon mines acquired in mid-2008.

Full year production at Lihir Island totaled a record 853,000 ounces in 2009, up from 771,000 ounces in 2008 and well in excess of the 770,000 – 840,000 ounces forecast for the year. The Million Ounce Plant Upgrade progressed into construction in 2009, with the project on track to lift gold production at Lihir to an average of one million ounces from 2012.

“The strong result from Lihir Island confirms the enhanced reliability of the operation following the various improvements we’ve implemented over recent years,” Mr Baker said.

In Côte d’Ivoire, the Bonikro mine produced 150,000 ounces in its first full year of production, within the guidance range of 130,000 to160,000 ounces. Strong progress was made in the feasibility study examining the potential to develop new deposits at Hiré, approximately 10 kilometres from Bonikro, and regional exploration activities continued to generate encouraging results.

At Mt Rawdon, in Queensland, gold production reached 108,000 ounces, above the 90,000-100,000 ounces forecast for the year.

In 2010 LGL has forecast production at Lihir Island of between 770,000 – 840,000 ounces, approximately 110,000 – 130,000 ounces from Bonikro and 80,000 – 90,000 ounces from Mt Rawdon. Total cash costs are forecast to be below US$450 (K1,192.84) per ounce.

The company will release its 2009 full year financial results on 18 February 2010.

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